Searched on google and found this guys post on what he did to fix it: I got the "cannot run unicode version of atl.dll on WIN95" too. It turns out something I installed overwrote atl.dll (Win95) with the atl.dll (NT) version.

Then I went to the microsoft site and searched atl.dll. It refers to an article about visual C++ or something. Downloaded the atlinstl.exe, copied the atl.dll (win95 version) into my windows/systems folder, and everything worked again.

In NT
1) try last known good configuration, but I dought it would work...
2) If the file system is FAT16, then boot off a DOS, win98 boot disk and do a search for the atl.dll file , rename it. See if you can boot to windows.

If the file system is NTFS, then you can download NTFS for DOS, and then follow same procedure. THere is a possibility that you may need to extract the file using the dos command.

THIS THREAD HAS EXPIRED.
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